CTIA Looks Ahead to Spectrum, Net Neutrality Fights

WASHINGTON -- The wireless industry has come under intense scrutiny from
federal regulators this year, some of it welcome, much of it not.

As the industry and its principal trade association, CTIA, look ahead to
next year, two looming issues stand at the top of the policy agenda, shining
examples of the love-hate relationship the wireless sector has with the
government.

Those would be efforts to make more spectrum available to for advanced
wireless data networks, a move the industry says is needed to stave off a
crisis in the making, and network neutrality, which it vigorously opposes.

At a meeting with reporters week, CTIA executives outlined their policy
agenda heading into the new year, a long list of priorities beginning with
the goal of prodding Congress and the Federal Communications Commission to
free up 800 MHz of spectrum for wireless networks.

But, they readily admitted, that figure represents a goal that is more
aspirational than realistic.

"I'd be shocked if they give us 800 additional megahertz, but if we could
get them moving forward on some significant portion of spectrum allocated to
the wireless industry, we think that's going to go a long way," said Steve
Largent, CTIA's president and CEO.

Reallocating spectrum, though a highly technical matter, also makes for a
very political fight. Spectrum is generally considered a finite resource,
and businesses and government agencies are famously reluctant to part with
it.

CTIA's quest for spectrum will put it at odds with spectrum incumbents
such as TV broadcasters and satellite companies, as well as government
entities, most notably the Department of Defense.

Largent testified earlier this week before a House subcommittee that is
considering a pair of bills that would require a thorough inventory of the
current uses of wireless spectrum and speed the process of reallocation.

A similar inventory bill has been introduced in the Senate, which CTIA
strongly supports.

"Let's just find out what's out there and who's using it for what
purposes. And just examine the landscape and see how much spectrum there
could be made available and then who owns that spectrum. We really don't
know," Largent said. "In my opinion, it's a little bit of a knee-jerk
reaction for DoD and the broadcasters just to think 'they're coming after
us,' and that's not the case."

Largent said he fully expects government authorities to scrutinize the
ways that the wireless companies he represents are using their own spectrum,
though he argues their technology makes more efficient use of the airwaves
than broadcasters and other groups. Additionally, CTIA could benefit from
the political momentum that seems to be building around the broadband
movement, as regulators and lawmakers warm up to the potential of the mobile
Web.

But it won't be easy, and politics are politics, Largent admitted.

"Everyone's going to experience some pain," he said, holding out hope for
a compromise. "We're not going to get all the spectrum we want. Broadcasters
are going to have to give up something. The Department of Defense is going
to have to give up a little bit, but at the end of the day, it'll work for
everybody."

The Net neutrality broadside

But if the wireless industry is planning a full-court press to open up
more spectrum, it's going to push back just as hard against efforts to make
Net neutrality the law of the land, as the FCC appears poised to do early
next year.

"Nobody's proven to me, anyway, that there's really a need for Net
neutrality rules in the wireless space," Largent said. "You just can't point
to very many instances where serves have been interrupted or prioritized or
anything in an untoward manner."

Telecom providers, as a rule, have long dug in their heels against any
attempt by the government to establish binding rules overseeing how they
manage their networks. Those concerns are particularly acute among many
members of the industry CTIA represents, which have argued that unlike
fiber, copper or cable connections, wireless networks can easily be
overwhelmed by data-intensive applications, to the point where critical
transmissions like public-safety communications could go down.

In announcing
his plan to establish Net neutrality rules for both wireless and
wireline providers, FCC Chairman Julius Genachowski acknowledged that
wireless warranted special treatment, but insisted that the
nondiscrimination regulation should apply to all ISPs.

But for CTIA, any rule threatens the vitality of the industry.

"These aren't limitations that are public policy limitations," said Chris
Guttman-McCabe, CTIA's vice president of regulatory affairs. "This is
physics, right? There are limitation within technology and physics that
require us to be treated differently."

He noted the seeming contradiction of policymakers admitting that
wireless providers don't have the spectrum they need to give their networks
sufficient capacity to support heavy data usage, while at the same time
pressing for neutrality rules that would hold them to a similar standard as
fiber and cable.

Still, with three of the five commissioners at the FCC already on record
supporting Net rulemaking, it appears that CTIA might be fighting an uphill
battle.

Among the other issues on the association's radar include backing a bill
that would place a five-year moratorium on new wireless taxes, and one to
remove cell phones from items considered listed property, an IRS designation
that sets boundaries between work and personal use.

Additionally, the association is fighting measures that would restrict
carriers' ability to impose early termination fees (ETF) on consumers for
canceling a plan before the agreement expired. The FCC is looking into the
issue, this week receiving responses to an inquiry from Verizon Wireless.

Early termination fees have also caught the attention of some lawmakers,
with a Senate bill pending that would limit the rate and scope of the
penalties.

But CTIA argues that carriers, who heavily subsidize the production and
marketing costs of smartphones, recoup that money through subscriptions,
which ETFs are meant to protect. Jot Carpenter, CTIA's point person on
federal legislative issues, said that without ETFs, those subsidies will dry
up, and consumers will end up paying the freight.

"I think the issue is a knee-jerk reaction on the Hill to what seems a
populist issue," Carpenter said. "But if that really were enacted I think
the logical result is the cost of handsets goes and I don't think that's a
good outcome for consumers."